USD/CAD Fundamental Analysis Jan. 31,2012, Forecast

Economic Events: (GMT)

13:30     CAD       GDP (MoM)     0.2%                      0.0%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. Canada releases fresh GDP data on a monthly basis.

A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD             

13:30     USD      Employment Cost Index (QoQ)     0.4%                      0.3%

The Employment Cost Index measures the change in the price businesses and the government pay for civilian labor. 

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.                          

 14:45    USD       Chicago PMI     63.0                        62.5                       

 15:00    USD       CB Consumer Confidence     68.2                        64.5

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.           

Analysis and Recommendations:

The USD/CAD is currently trading 1.0036, reaching a 3 day high against the Canadian dollar.

Last week economic data from the US was dissappointing earlier in the week, housing and unemployment data did not reach forcasts. The Commerce Department reported U.S. consumer spending came to a virtual standstill in December after climbing 0.1% the month before.

The over riding factor today was problems with the Greek settlement.The discord came as European Union leaders met in Brussels Monday for their first summit of the year to finalize a deficit-reduction agreement and support the setting up of a rescue fund. There was no Greek deal ready to be presented as the negotiating team was still in Athens without reaching final agreement.

 

Scheduled Sovereign Bond Sales

Jan 31  10:30  Belgium  Auctions 3 & 6M T-bills

Jan 31  15:30  UK  Details gilt auction on Feb 07

Feb 01  10:10  Sweden  Auctions T-bills

Feb 01  10:30  Germany  Eur 5.0bn 2.0% Jan 2022 Bund

Feb 01  10:30  Portugal  Eur 0.75-1.0bn 3M T-bill

Feb 01  10.30  UK  Auctions 5.0% 2025 conventional Gilt

Feb 01  15:30  Sweden  Details nominal bond auction on Feb 08

Feb 01  16:00  US

Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb

08 & 30Y Bonds on Feb 09

Feb 02  09:50  France  OAT Auction

Feb 02  10.30  UK  Auctions 0.125% 2029